UK Hotel Performance Continues to Struggle

9 July 2003

May 2003 results from the UK edition of the HotelBenchmark Survey by
Deloitte & Touche revealed a fifth successive month of revPAR (revenue per
available room) declines for the UK hotel industry during 2003. This
performance mirrors the longer-term trend for the UK hotel industry, which
in the last two years has only reported five months of positive revPAR
growth. During May revPAR fell by 7.7 percent compared to the prior year,
driven predominantly by a 5.7 percent decline in average room rates.
Although regional UK hotels (i.e. excluding London) also experienced a dip
in revPAR, this was limited to only 2.1 percent.
Of the 13 regions tracked across the UK only five managed to improve their
performance compared to May 2002 - Cheshire, Greater Manchester, Hampshire,
Lancashire and hotels along the M2/M20 corridor. This trend was reflected
across UK cities, with only eight of the 20 cities tracked experiencing any
growth. York, Manchester and Sheffield were amongst the top three
performers, reporting an increase in revPAR of 7.1, 6.9 and 4.5 percent
respectively. Conversely, the greatest declines were experienced in
Brighton, Swindon and Heathrow, where revPAR fell by 13.5, 11.3 percent and
9.4 percent respectively.
Year-to-date performance shows an overall decline in revPAR across the UK
hotel market of 6.8 percent to £45, with regional hotel performance falling
by just 3.1 percent to £39. Whilst the majority of markets are still
experiencing revPAR declines, the only ones to have slipped into
double-digit territory are UK hotels with an annual average room rate over
£75, Berkshire, West Midlands, London and Brighton.

Only 12 of the 47 markets tracked on the survey have managed to improve
their performance so far in 2003, with Lancashire, Cardiff, Belfast, Wales
and Manchester amongst the top five strongest performers. Hoteliers in the
northwest markets of Lancashire and Manchester have experienced an increase
of revPAR of 9.2 and 4.3 percent respectively, stemming in part from
increased demand from the commercial sector. During 2002 gross domestic
product (GDP) of the northwest was nearly 9 percent, compared to just 1.6
percent for the UK.
The UK edition of the HotelBenchmark Survey collects occupancy and average
room rate data from over 1,350 hotels representing nearly 145,000 rooms
every month, making it the largest independently run survey on UK hotel
performance. For further information or details on how to join the survey
please contact Rob Gray -